US software giant Adobe is facing an EU investigation into its proposed $20 billion acquisition of cloud-based designer platform Figma.
In an unexpected move, the European Commission opened a full-scale probe into the deal, citing concerns that the transaction could undermine the supply of tools for interactive product design, digital asset creation, and ultimately reduce competition in the global markets, reported Bloomberg.
The commission said Adobe’s offer could remove “an important competitive force” and allow the Photoshop maker to restrict competition in the supply of interactive product design tools. They warned the acquisition could also affect Figma’s potential to grow into an effective competitor to Adobe’s asset-creation tools and reduce competition in the sector even further.
Speaking about the probe, European Commissioner for Competition Margrethe Vestager said: “With our in-depth investigation, we aim to ensure that users continue to have access to a wide pool of digital creative tools to choose from.”
Adobe, for its part, remains confident of the merits of its acquisition and stated that Figma’s product design was an adjacency to Adobe’s core creative products and that they had no meaningful plans to compete in the product design space.
The probe into the deal follows a preliminary review by the European Commission that raised suspicions as to the detriment the acquisition might cause for the industry. Meanwhile, the UK’s Competition and Markets Authority (CMA) has also asked Adobe to address its concerns by coming up with suitable solutions.
This is not the first time the EU has scrutinized a company’s takeover plans for potential anti-competitive effects. Last year, regulators hit Google with a €1.49 billion ($1.76 billion) fine for freezing out rivals in online advertising.
The commission will now assess the deal and decide by Dec. 14 whether to approve or block it. Whichever way the regulator chooses to go, the outcome of the investigation is certain to leave a lasting impact on the global markets for interactive product design tools.